Tuesday, July 1, 2014

What happens if I lose my job? Please tell family and friends

Losing your job may create new tax issues for you and your family. If you or a family member loses their job, be aware that the following items are taxable:

   * severance pay,
   * unemployment compensation, and
   * payments for any accumulated vacation or sick time.

Public assistance and food stamps are not taxable.

To avoid an unexpected bill at tax time, you should ensure that enough taxes are withheld from these payments or make estimated tax payments.

To learn more about the tax issues that could affect you, including additional items that may be taxable, read Publication 4128, Tax Impact of Job Loss, or visit IRS.gov.

If you believe you may have trouble paying your tax bill, contact the IRS immediately. There are steps we can take to help ease your burden. You also should file a tax return even if you are unable to pay so you can avoid additional penalties.

Also visit IRS.gov’s web page –The “What Ifs” for Struggling Taxpayers

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